Venezuela in bank nationalisation

Nationalisation is a major policy of Hugo Chavez

Venezuela has nationalised its third largest lender, Banco de Venezuela, after agreeing to pay $1.05bn (£660m) to Spanish owner Banco Santander.

The move follows months of negotiations between the government and Santander over how much Caracas would pay.

Venezuelan Vice-President Ramon Carrizalez said the move would allow the government to assert greater state control over the economy.

Banco de Venezuela is just the latest firm to be nationalised in the country.

Since 2006, Hugo Chavez's government has taken into state ownership Venezuela's largest telecommunications, electricity and steel companies, and four major oil projects, as it aims to create a state-run socialist economy.

'Satisfactory'

Banco de Venezuela president Michel Goguikian said the deal was "very satisfactory" for both sides.

The government will pay Banco Santander an initial $630m, with the remainder to be paid in two instalments in October and December.

The country's economy grew at its slowest rate in five years during the first three months of 2009, as it continued to feel the effects of falling global oil prices.

Venezuela is the world's ninth largest oil producer.